Cigno Australia Penalised $7 Million for Unlawful Payday Lending Practices

The court found that Cigno Australia and BSF Solutions engaged in a lending model that circumvented established credit regulations, resulting in the collection of over $91 million in fees and charges from consumers. Each company has been fined $3 million, while directors Mark Swanepoel and Brenton Harrison have been ordered to pay $500,000 each.

ASIC Chairman Joe Longo emphasised the significance of this outcome, stating that it reflects the regulator's dedication to protecting Australians from exploitative lending and holding accountable those who breach financial laws. The court noted the severity of the violations and the substantial harm inflicted on consumers, highlighting the absence of remedial actions or expressions of remorse from the involved parties.

Despite the directors' claims of seeking legal advice to ensure compliance, the court determined that this did not absolve them from liability. The ruling serves as a stern warning to financial entities about the consequences of attempting to evade credit laws and the importance of adhering to ethical lending practices.

For consumers, this case highlights the necessity of vigilance when engaging with lenders, particularly those offering quick cash solutions. It is crucial to verify that any financial service provider is licensed and operates within the bounds of Australian credit laws to avoid falling victim to unlawful lending schemes.